Keep in mind that the statute actually says "You can receive income in the form of money, property, or services." If you make the argument that the sword doesn't actually belong to you, then the IRS can turn around and say "you received a service in the form of the loan of the sword. Pay up."
While I'm inclined to suspect that cooler heads will prevail in all this, I would not simply write off the danger raised here. One can argue that the fact that we're even having this conversation is proof that the IRS is too powerful, and needs to be put up against the wall.
I mean, seriously - "I don't think it's a good idea to wait until the IRS has already started writing rules." *blink* Am I the only one who sees the elephant in the middle of the damned room? The IRS is going around deciding what it can and can't tax. Not elected officials, a bunch of lifer beauracrats.
I think you will find that Congress is perfectly prepared to exercise its powers of oversight over the IRS, as is the executive branch. If there were significant public outcry over an IRS ruling or regulation, it would swiftly fall victim to new legislation.
On the other hand, I think you may be surprised to find that both the executive branch AND Congress won't be too upset to discover that the IRS has found a new revenue stream. So while the issue IS being decided by a bunch of lifer bureaucrats, don't fall into the hole of naivete that is thinking that they're running the whole way there alone.
I think that the funding of government is always a tricky and sensitive issue. It may actually be fairer at this point to drop taxation from the income side of the equation and place it at the consumption side - i.e., switch from a national income tax to a national sales tax. This might have the added beneficial side effect of encouraging an increase in the national savings rate, which is ALARMINGLY low at present. In terms national,
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National Sales tax is my prefered plan. Eliminate all federal taxes other then a straight up 25% tax on all goods and services (including food, medical care, etc).
The IRS has approached this issue previously (as reported above). There's even been an NPR story about the taxation issues surrounding online income. And they really should hammer out [i]some[/i] sort of consistent policy, as it is becoming more and more possible to maintain an entire existence using only resources obtained in virtual environments (probably the easiest instance to cite is Magic Online, in which it is still legal and within the terms of the user agreement to buy and sell virtual objects
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While I'm inclined to suspect that cooler heads will prevail in all this, I would not simply write off the danger raised here. One can argue that the fact that we're even having this conversation is proof that the IRS is too powerful, and needs to be put up against the wall.
I mean, seriously - "I don't think it's a good idea to wait until the IRS has already started writing rules." *blink* Am I the only one who sees the elephant in the middle of the damned room? The IRS is going around deciding what it can and can't tax. Not elected officials, a bunch of lifer beauracrats.
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On the other hand, I think you may be surprised to find that both the executive branch AND Congress won't be too upset to discover that the IRS has found a new revenue stream. So while the issue IS being decided by a bunch of lifer bureaucrats, don't fall into the hole of naivete that is thinking that they're running the whole way there alone.
I think that the funding of government is always a tricky and sensitive issue. It may actually be fairer at this point to drop taxation from the income side of the equation and place it at the consumption side - i.e., switch from a national income tax to a national sales tax. This might have the added beneficial side effect of encouraging an increase in the national savings rate, which is ALARMINGLY low at present. In terms national, ( ... )
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